9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (4) TMI 1161 - HC - GSTCancellation of GST registration of petitioner - failure to file returns for a continuous period of six months - rejection of appeal on the ground of time limitation - HELD THAT - Taking note of the submissions made by the petitioner and the fact that suspension/revocation of the license would be counterproductive and works against the interest of revenue since in such case the petitioner would not be able to carry on its business in a sense that no invoice can be raised by the petitioner and the same would ultimately impact the recovery of tax and as such it would be in the best interest of the respondents to take a pragmatic view in the matter so as to permit the petitioner to carry on its business. The order of cancellation of registration dated 26th September 2023 under the said Act set aside subject to the condition that the petitioner files its returns for the entire period of default pays requisite amount of tax interest fine and penalty if not already paid. Conclusion - Cancellation of registration under the WBGST/CGST Act for non-filing of returns is valid if procedural. Petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the order of cancellation of registration under the WBGST/CGST Act, 2017 Relevant legal framework and precedents: Section 39 of the WBGST/CGST Act mandates filing of returns by registered persons. Failure to file returns continuously for six months empowers the tax authorities to cancel registration. The procedural requirement includes issuance of a show-cause notice before cancellation. Court's interpretation and reasoning: The Court noted that the petitioner was issued a show-cause notice on 5th July 2023 for failure to furnish returns for six consecutive months. The petitioner did not respond to the notice, and consequently, the registration was cancelled on 26th September 2023. No application for revocation of cancellation was filed by the petitioner. Key evidence and findings: The records clearly established the issuance of the show-cause notice, non-response by the petitioner, and subsequent cancellation. The petitioner admitted non-filing of returns due to reasons beyond control but did not take procedural steps to challenge or revoke the cancellation timely. Application of law to facts: The cancellation order was passed in accordance with the statutory provisions. The petitioner's failure to respond or seek revocation meant the cancellation order was legally valid and enforceable. Treatment of competing arguments: The petitioner argued for leniency citing intention to comply and reasons beyond control. However, the Court emphasized the statutory mandate and procedural compliance, affirming the validity of the cancellation order. Conclusion: The cancellation order was legally sustainable given the petitioner's default and procedural compliance by the authorities. Issue 2: Legitimacy of the appellate authority's rejection of appeal on limitation grounds Relevant legal framework and precedents: Section 107 of the WBGST/CGST Act prescribes the time limit for filing appeals against orders passed under the Act. Appeals filed beyond the prescribed period are liable to be rejected as barred by limitation. Court's interpretation and reasoning: The appellate authority rejected the petitioner's appeal dated post the limitation period. The Court acknowledged that the appeal was filed beyond the statutory time frame. Key evidence and findings: The appeal was filed after the expiry of the limitation period, and no sufficient grounds for condonation of delay were presented. Application of law to facts: The appellate authority correctly applied the limitation bar in rejecting the appeal. The petitioner's failure to adhere to the limitation period was fatal to the appeal's maintainability. Treatment of competing arguments: The petitioner did not contest the limitation issue in detail but sought restoration on merits and undertook compliance. The respondents relied strictly on limitation as a bar. Conclusion: The appellate authority's rejection of the appeal on limitation grounds was justified and in accordance with law. Issue 3: Entitlement to restoration of registration despite procedural defaults and delayed appeal Relevant legal framework and precedents: While the statute provides for cancellation and appeal within limitation, courts have discretion to grant relief in exceptional circumstances to balance revenue interests and business continuity. Court's interpretation and reasoning: The Court recognized that suspension or revocation of registration would be counterproductive, as it would prevent the petitioner from issuing invoices, thereby adversely affecting tax recovery. The Court emphasized the pragmatic approach to allow the petitioner to continue business operations. Key evidence and findings: The petitioner expressed willingness to comply with all statutory requirements, including filing all pending returns and payment of tax, interest, penalty, and fine. Application of law to facts: The Court exercised its discretionary power to set aside the cancellation order subject to strict conditions of compliance within a specified timeframe. Treatment of competing arguments: The respondents opposed restoration based on procedural defaults and limitation but did not dispute the Court's power to impose conditions for compliance. Conclusion: Restoration of registration was granted conditionally to protect revenue interests and enable the petitioner to resume business. Issue 4: Appropriate conditions and directions for restoration Relevant legal framework and precedents: The Court's power to impose conditions when granting relief in writ petitions under Articles 226/227 includes ensuring compliance with statutory obligations and safeguarding revenue interests. Court's interpretation and reasoning: The Court directed the petitioner to file all pending returns, pay tax dues, interest, fine, and penalty within six weeks. The jurisdictional officer was directed to activate the portal within seven working days to facilitate compliance. Key evidence and findings: The undertaking by the petitioner to comply with all dues was taken into account to frame the conditions. Application of law to facts: The Court balanced the petitioner's interest in continuing business and the respondents' interest in tax recovery through conditional restoration. Treatment of competing arguments: No opposition affidavit was filed; hence allegations were deemed not admitted. The Court's directions aimed at ensuring compliance and preventing misuse. Conclusion: The restoration is conditional upon strict compliance within the stipulated time, with failure resulting in dismissal of the writ petition. 3. SIGNIFICANT HOLDINGS The Court held: "Taking note of the submissions made by the petitioner and the fact that suspension/revocation of the license would be counterproductive and works against the interest of revenue, since in such case, the petitioner would not be able to carry on its business in a sense that no invoice can be raised by the petitioner and the same would ultimately impact the recovery of tax and as such it would be in the best interest of the respondents to take a pragmatic view in the matter so as to permit the petitioner to carry on its business." Core principles established include:
|
